New Check Norms
Sign Your Checks with Darker Ink
As per the Reserve Bank of India directives, from January 1, 2013, all banks across India will only accept checks signed with darker ink. This move is part of the effort to standardize and enhance security features in check forms, and facilitate migration to the CTS (check truncation system) 2010 standard. Banks will now issue only CTS 2010 standard checks, and eventually, all banks are expected to move on to this new system.
What is a Check Truncation System (CTS)
In a CTS, instead of a physical check, an electronic image is sent to the drawee bank, with all the information needed to process it - such as the nine-digit MICR code, the date of the check and the details of the presenting bank. This eliminates the need to transport a physical check from the presenting bank (where it is deposited) to the drawee bank (where it is issued).
Faster: Clearance is faster when there is no physical movement of checks. The time to clear an inter-city check reduces drastically, from the existing three to seven days, to within a day or two.
Safer: With CTS, chances of a check getting damaged or lost in transit are virtually nonexistent.
Checklist for Customers
Request for CTS: Place a request for CTS 2010 standard checks and return the non-CTS checks for cancellation.
Ink: Ensure the checks are signed in darker ink, so that your signature is captured clearly by the software.
Be Careful: Take extra care while filling in the checks as there is no room for error in the CTS; any alterations on the check will result in it being rejected. While this minimizes the risk of fraud, it also means that the bank may charge you for extra check leaves.
With the RBI making CTS mandatory across all banks, be sure to include "one good quality, dark pen" to your shopping list!